The annual quarter-on-quarter growth rate was slightly lower than expected at 3% but means GDP is now only 0.6% below its pre-economic crisis level

Encouraging signs of a strengthening of Britain's economic recovery have emerged today with new figures showing that investment by businesses grew by a larger than expected amount in the first three months of this year.

The Office for National Statistics (ONS) said investment rose by 5%, or £1.6bn, on the previous quarter to £33.4bn in the first three months of the year, meaning five consecutive periods of growth for the first time since 1998.

The improvement, which indicates that the UK is becoming less reliant on consumer spending, was responsible for half of the overall first-quarter GDP rate of 0.8%.

This figure was left unchanged on earlier estimates as better construction output was offset by a downgrade in the services sector.

The annual quarter-on-quarter growth rate was slightly lower than expected at 3% but means GDP is now only 0.6% below its pre-economic crisis level.

The Chief Secretary to the Treasury Danny Alexander said: "Business investment tends to lag behind other indicators of recovery, so it's pleasing to see strong business investment growth of 10% over the year."

Spending was up 0.5% in the quarter and was achieved without requiring households to put aside a smaller proportion of their incomes as the ONS said the savings rate rose slightly to 4.9% from 4.8% in the fourth quarter.

The current account deficit, which shows the UK's trade in goods and services as well as income and current transfers, narrowed from the fourth quarter's £23.5bn but it was still £18.5bn, equal to some 4.4% of GDP.

The weakness reflects a fall in income from UK assets overseas, compared with income from foreign-owned assets in the UK, in the wake of the recent strengthening in sterling.

Samuel Tombs, an economist at consultancy Capital Economics, said there were reasons to expect the deficit will narrow in the years to come.

He said: "Much of the weakness has reflected poor returns of the UK's overseas direct investments, which are concentrated in the eurozone. Now that the eurozone is out of recession, these earnings should slowly recover."

Mr Tombs said there was little in today's data to suggest that the UK's recovery is built on "weak foundations". He continues to think that the GDP will grow by 3% both this year and next.

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